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Crowdsourcing: A Definition

I like to use two definitions for crowdsourcing:

The White Paper Version: Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.

The Soundbyte Version: The application of Open Source principles to fields outside of software.

The Rise of Crowdsourcing

Read the original article about crowdsourcing, published in the June, 2006 issue of Wired Magazine.

March 10, 2009

Is Crowdsourcing Evil and Other Moot Questions ...

Crowdsourcing, by its very name, encourages a comparison to outsourcing. But when Wired first published the article that entered the term into the popular lexicon, it was far from clear whether the phenomenon would realize its disruptive potential. Three years later it seems increasingly obvious that it will. Aided by a new generation of sophisticated start-ups, ever cheaper creative tools, and — most of all — a recession that is forcing cost-saving measures on businesses, crowdsourcing is rapidly migrating from the fringe to the mainstream.

Witness the upheaval currently afflicting the design industry, sparked by the rise of so-called "spec design" sites like crowdSPRING and 99designs. On these sites customers post creative briefs directly to the community, which then competes to create a design that best fits the clients' needs. A typical "assignment" will draw dozens of submissions. The winner receives a nominal fee (as little as $200), and the client
receives a logo or Website design at a fraction of what a professional
agency might charge. The losers get zip, which goes a long way to
explaining why working on spec (aka 'on speculation," or without
guarantee of payment) has always been considered the work of last
resort for writers, designers and other creative professionals.

So one might expect crowdSPRING and 99designs to wither away like so many other seemingly ill-conceived Web 2.0 start ups. Instead, they seem to be flourishing. 99designs says it has paid out over $4 million to its community of 30,000 artists, and crowdSPRING expects to be profitable by next year. The success of crowdsourced design has sparked a vibrant, highly emotional debate within the design industry. (The brouhaha will go live at SXSW next week, when I moderate a panel on the subject of spec work in design.)*

Alarmed by the popularity of the spec model, a group of designers formed a protest group called NO!SPEC to persuade their colleagues (and prospective clients) to just say no to design contests. Their effort has not been in vain. The trade group AIGA — composed of some 22,000 designers — has gone so far as to stake out an official position on spec-work: "AIGA strongly discourages the practice of requesting that design work be produced and submitted on a speculative basis in order to be considered for acceptance on a project."

The controversy shifted into high gear last month after Forbes published an airy, one-sided look at crowdSPRING. In over 100 comments to the article one could read persuasive, articulate variations on a single theme: "Fuck you and crowdSPRING too." Severalprominentdesign blogs posted their own jeremiads lambasting crowdSPRING. "Spec work has become a major force in devaluing the perception of graphic design in the business world," writes eyeCinq. "The folks that run these outfits have managed to figure out a way to get thousands of people — some skilled enough to earn a decent living — to work for them gratis. It’s an amazing sleight-of-hand," writes the logo factor.

It would seem that the squabble has united the design community against the barbarians at their gate. And that would seem to bode ill for the future health of the spec sites, right?

Don’t count on it. A similar debate was taking place in the stock
photography world when we published “The Rise of Crowdsourcing” back in
that bygone era of June 2006. The fact this debate has been largely
settled — in favor of the barbarians — speaks volumes about where
graphic design, and, for better or worse, most other creative fields,
are heading.

I made this explicit comparison
on my blog last August. The demand for low-end design has ballooned in
recent years alongside the profusion of start-ups and small businesses.
Conveniently enough, so has the supply of what we might call "low-end
designers" (amateurs, recent grads and the like). According to Forbes
there are 80,000 freelance designers in the US alone. Most of these
are, proverbially speaking, waiting tables. When someone matches demand
and supply, well that's kismet!

iStockphoto and other so-called "microstock" agencies capitalized on
a similar disparity. The result was the total disruption of the $2
billion stock photo industry. iStock is now the third-largest purveyor
of stock images, and some 96 percent of its "workforce" is comprised of
amateurs. In my crowdsourcing book I posed the question of whether
stock photography was an isolated case, or just the canary in the coal
mine. It was an open question as of April 2008 when I submitted the
final changes to my galleys. Now it ain't. The canary is prone, lying
motionless on a bed of its own droppings. It looks like it's time to
find another mine.

* Two of my co-panelists have written their own distinctive takes on the debate. Please check out Threadless.com's Jeffrey Kalmikoff on the spec debate, as well as Forrester analyst Jeremiah Owyang's advice to designers.

Comments

Great article Jeff!!! Once again you had hit the nail on the head!!

All I can say is fear fear and more fear; this is the foundation for the controversy. The source of this fear is really the imminent change at hand in the market as a whole. The fact of the matter is that we all have to change and adapt to this new economical climate. Those who can't keep up will create protests. Those who can keep up will adapt and succeed. In flush times everyone succeeds and that is what we have been used to for the last several years. In difficult times - it is survival of the fittest.

The fact of the matter is that crowdsourcing is getting stronger and stronger because it makes sense. This scares people which also makes sense. I look forward to seeing who is the fittest and who protests!!

I am excited to listen to the panel and continue the conversation that we have had around these here parts (Its Boulder, we can sound Western...).

There is a constant fight for equilibrium between business interests and service providers, where businesses will always undervalue the esoteric value of intangibles, and service providers will always overvalue them.

There is not a service industry that is not touched by the concept of spec work or unfavorable (to the service provider) competitions. The canary has been dead for awhile, people just have named it.

Of most service industries, graphic design (and design as a whole) is probably the most disparate in perceived and actual value. How do you value "art"? How do you value "feeling"?

Businesses apply a value to everything. When I sold my company, when I agreed to accept a non-compete that had a value. The association of my name to the new company had a value.

The positive of the spec work revolution is that it forces designers to think: 1) am I talented enough to be charging what I am charging; and 2) what is the real value I bring to the table that can be counted by my client (the business) in dollars.

The negative is that designers are realizing that their perceived value is not equitable to their real value.

(There is also the reality of the economic abundance of designers makes it easy for spec work to exist. If I were a designer I would stop worrying about spec work and get more people to quit the industry.)

At the end of the day, being underpaid for valuable work sucks, which is what the specter of spec work brings. Want to combat it? Dont suck. Provide value. Set realistic expectations.

But I can see one difference between microstock websites and sites like crowdSPRING: the former sells generic work which means you can sell it to several customers. The latter sells customized work which means it's designed for one potential customer only. In other words, plenty of designers come up with great work for nothing.

I'd be curious to know statistics about win rates among (serious) designers. How many jobs do they have to come up with for each one they win? How many gets discouraged because they kept being #2, even out of dozens?

The comparison with photography is indeed very pertinent. Crowsourcing for graphical design will indeed change the world of designers - no choice.
Now... Don't you thing crowdsourcing might also change the world of marketing in a short future?

I think that I take a bit of a different perspective. As a trained musician, I can see some real parallels between crowdsourcing and the patronage system that existed during the Baroque and early Classical. Is crowdsourcing creating a volume of largely useless and trivial material, since we are trying to please the "patron" in order to win the contract? Or, should we be looking at the other side of the coin, and say that an artist (a graphic artist, web designer, etc.) should be able to create as they want, and not be forced to comply with strict, stodgy or outdated rules and thought?

From a benefactors side, I would like the idea of crowdsourcing. I can get more ideas and more alternatives to a proposal or concept than if I went to only a few vendors. granted, I am saving money, but am I also creating animosity among those not selected? Do I care? Should I care?

While crowdsourcing may produce a real gem from time to time, it may also be dredging up some rocks that are of now value. Do we really want to create a volume of sub-standard materials that could eventually degrade all of the products? Will we be having a tougher time sorting the wheat from the chaff?

Crowd-sourcing is Outsourcing, and lets not confuse "Crowd-sourcing" with "Open Source" because Crowd-sourcing is a convenient buzzword that sounds like Open Source...

Managerial types invent ways to cut corners and when its convenient, "Open Source" and "Web 2.0" become convenient words to excuse substandard business practices, the same way the enthusiasts of the WTO and NAFTA used excuses to ship our jobs overseas explaining that it was good because we lived in a global community anyway. Those people didn't do any of the real work then and they don't do any of the real work now. They manage. They shuffle. The workers get hurt by their lack of ethics. We still shipped our manufacturing and tech jobs overseas and the only person who gained anything were the managers and CEOs. We got cheaper junk in WalMart which only breaks twice as fast as it did 15 years ago because those manufacturers we outsourced to subcontracted it do others who could do it even cheaper.

Open Source is a designer's way (or programmers, artists, etc) of contributing to the rest of the design community. Crowd-sourcing is a way for management to get lots of free work.

The most offensive crowdsourcing examples I see are for art or music projects where I think they get away with it because illustrators or musicians or the artists concerned aren't expected to be paid much anyway.

The debate ran through the Chicago design community like a wild fire, the news was so hot for a day or two it felt like we might have a second Great Chicago Fire.

NO!SPECK say in their blurb “that spec work devalues the potential of design and ultimately does a disservice to the client.” If the client “chooses” a crowdsurfer/artist are they are doing “themselves” a disservice. Somehow does not sound right, or are they just reacting to changed circumstances?

And this looks like a small print warranty coverall. “Those who use creative services, as well as creative professionals (designers, photographers, illustrators, typographers, writers and those in marketing, branding and advertising).”

There can be no doubt that the common denominator is going to pull at issues of quality, what’s new. Recent technologies has done away with many of the barriers that have traditionally sheltered professional in gated communities whilst holding many at bay and locking out innovators on both sides of the equation.

In education this debate might be called a generational gap, the divide that exists between institutional control and change. The supply, demand chain has been on the move for a very long time yet life roles on and it will continue to do so.

David; as sad as it is America is the home of materialism and unless the masses awake from the consensus trance, the decline of much in our world will continue.

Basically: just because its cheaper and there's more of it doesn't mean its better. Let me refer to about any contemporary music: call it the "Lil' Wayne-ization" of art world: just because its free and its everywhere doesn't mean its good. It means that if the pool of designers grows to include the stay at home mothers, then you're starting with a tainted pool of talent rather than a pool of professionals, and the overall quality goes down.

I think that the clients who understand design and the value of working hand in hand with an experienced and qualified creative professional aren't going to fall into this void.

It’s amazing that the creative one’s with our vision to the future are reluctant against co-creation. It’s a misunderstanding that co-creation’s businessmodel is the same as a design contest. I also think that design contest are easy and cheap ways to fill a company idea portfolio.

The role of the creative community is changing from creator to inspirator and director.

I think I recall a few years ago that Hollywood actors were complaining about the rise of reality-shows. Since then, it seems that reality shows have plateaued in popularity. There are still some, but they are not showing up everywhere anymore. I think we will see the same with various kinds of crowdsourcing; there will be some, but there will also be a need for professionals who can deliver consistent quality.
I just wrote a blog-entry here: http://minimumnoise.wordpress.com/2009/03/03/negative-sides-to-crowd-sourcing

No!Spec existed before crowdsourcing. The original intention was to empower graphic designers into refusing to do unpaid work, such as in a case where an employer asks you to create something as part of applying for a job.

I remember because I did this for a job once, the year I graduated out of high school, and I always think back to that with guilt.

A crack down on crowdsourcing and spec work is a waste of energy. There's no need for graphic designers to panic either. A good long hard look at the value of graphic design services might make more sense. Let's face it, design is a commodity.

Graphic design is highly commoditised because the market is saturated and the barriers to entry are low. Everyone with a pencil or a computer is a graphic designer. Even the casual designer knows to avoid Comic Sans. On balance we all benefit from graphic design literacy. The market grows and as a result tools improve and client expectations become more sophisticated.

Graphic design tools are being thoroughly democratised. Cost is dropping and the onward march of good free cloudware is unstoppable. It won't be long before services such as Raven, Sumo Paint and Fonstruct are as good as Illustrator, Photoshop and Fontlab. Bring them on I say.

Hats off to Crowdspring and 99Designs, they've capitalised on a commoditised market. They've highlighted the actual value of what gets traded.

If you buy logo design services you will get a logo. The quality of which is measurable against the ambitions of the business strategy. If the only manifestation of the business strategy is a logo then there is not much of a brand identity to speak of. The success of the brand is then likely to be very limited and the logo won't be worth much.

Professional graphic designers need to be specialists. They need to develop proprietary methodologies in service of business strategy. Business strategy requires marketing knowledge best bought from specialists. These specialists are unlikely to be found by crowdsourcing. Designers who work in this manner are also unlikely to feel threatened by crowdsourcing.

As for spec work, that is the prerogative of the graphic design service provider. A client who is not prepared to pay for a taste of the process is probably a client not worth having.

Great, thought provoking responses all. Thanks for weighing in, folks. A few notes: I don't think crowdsourcing will infect every corner of the design industry. That's silly, and plenty of precedent (including my old stand by, stock photography) argues against that. Much of the defense of professional design line of argument here and on the Wired pages takes the stance that a) good design is a process between the client and the artist; and that b) top-level work won't be found on the spec-work sites. I suspect that's true, but it doesn't mean that a lot of the low- to mid-tier design work (or, as JJeffryes likes, "graphics" work) won't be commissioned through a crowdsourced marketplace. The economics simply make too much sense. As many of the commenters point out, the barrier to entry is low, the pros don't have a monopoly on imaginative visual solutions and most importantly, there's an enormous supply of entry-level or wannabe designers out there.

I love crowd sourcing design, but tend to go direct more now that I have located the talent (for 1/4 the price of the contest cost. I wrote a post recently on my experience crowdsourcing a logo/header design. I am trying to educate small businesses on how to do crowdsourcing properly. Read my experience with "Spec" at http://www.emarketingmatador.com/design-well-fast-cheap.

I do want to mention one thing, and this is why I go direct now. There is an element of unfair trade when you think of people in developing nations competing for a chance at our jobs. I would like to advocate fair-trade once you discover where the talent lies and go direct.

Fascinating thread. It seems that no matter how many times history plays out the hand dealt to inefficient markets, the next inefficient market to be assailed wails in protest. What I take from the NO!SPEC folks, is that they would have resisted enabling stock trades to happen through anything but a paid broker, or that they are on the side of real estate agents in their fight with the discount agents or websites that perform similar services without the 6% fee.

It’s crazy that folks don’t look at the markets that bloom around the growth that happens when inefficiencies are eliminated. Turns out that stock brokers didn’t go out of business, but rather provide value added services to a market of American investors that is 10 times the percentage is was pre-online trading (less than 5% to over 50% of Americans). This huge increase in the market and volume has increased the need for professional help.

As a startup software design company our limited budgets at the beginning only enabled us to pay for ‘logo’ work rather than the real design overhaul that only a professional can deliver (doesn’t do much good to have a professional design if you then can’t afford to the production graphics work to execute on it). So, instead of getting this seriously value added service, we paid through the nose for a few logos that in the end did not really coalesce into a nice U.I. Now, we simply Smartsource* that kind of work out for a few dollars apiece once the pros create our branded design and layout. We’re paying the high margin fees to those folks that actually have differentiated talent instead of pittering away lesser fees on one of the space saturating multitudes.

Per Peter Organisciak’s comment, there is no need for graphic designers to panic. By making the access to truly commodity graphics services very cheap and efficient, the budgets available for the skilled work that can never be commoditized will increase. That’s all good.

Speaking of Crowdsourcing questions...Can someone please help? I am a MBA student from South Africa doing my research report on the supply side of Crowdsourcing.
Does anyone know of any market research that was done on the supply side of crowdsourcing? And , does anyone know of market research surveys on crowdsourcing doing the rounds?
Any help will be appreciated.
Thank you very much

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WOW!! You are SO ignorant. This is NOT even an issue that is up for "debate" (as you say), my friend. Allow me to educate you in some basics of copyright law in the USA...

What companies like "99 Designs" and "CrowdSpring" are doing is not only illegal in the USA, it is highly unethical as well. First of all, one of these sites states that, "After the prize is paid in full, the ownership lies with the contest holder which is royalty-free and irrevocable.", which is absolutely LUDICROUS!!! There are ONLY nine categories (as enumerated clearly in copyright law) by which works can even be considered eligible to be work-for-hire. These "contests" (and I say this loosely, since they do not have a proper judging panel, proper contest rules, nor proper "alternate means of entry", which EVERY real contest must have in order to even be LEGAL in this country) fall into NONE of these nine categories, so what these companies are REALLY doing here is ripping off young designers fresh out of school who are too green to know their rights. They are simply skirting labor laws, and attempting to steal intellectual property from others. FOR SHAME ON ANYONE WHO DOES THIS!!!

Furthermore, when you pay a real professional to create for you, yes, it is more expensive, but you know that the professional is working on real licensed software that they actually have the right to use, not some cracked program they ripped off of some file-sharing service, which can embroil YOU in legal troubles further down the road. Also, you have this crazy thing that most of these "crowdsourcing" places I see don't have called a CONTRACT, which acts as your legal receipt, and actually guarantees you that the work in question is 100% original. It also covers such mundane things as CHOICE OF LAW, so if you do run into any legal troubles down the road as a result of any design works that you have commissioned, you know where you have to appear in court, and you know that your artist is obligated to show up as well.

"Crowdsourcing", as you call it, is a truly uninspired idea thought up by someone who obviously has no knowledge or understanding of copyright laws in the USA. Time is money, people. Think about it!! No real professional has time to waste creating free works for you. Would you insult a contractor in this way? - "Just build me a few free houses, and if I like one, I'll buy it for an amount of my choosing???" - NO!!! Absolutely not!! You would never DARE to insult other professionals in this way, so don't you think that maybe, JUST MAYBE, you should show professional artists the same level of respect, which they rightly deserve?

Slavery was outlawed in this country long ago. Let me elaborate... even IF these people were your on-site employees, you do understand that you would not get any rights to their works if you were not at least paying them the federally established minimum hourly wage, right? So why on earth, when they are NOT your employees, and they are NOT being fairly paid, would you possibly think for a moment that you could own these artists' works?

If someone is not your employee, and they perform work off-site, on their own equipment, on their own software, paying for their own electricity, receiving no benefits of any kind whatsoever from your company, and said work results in the creation of intellectual properties, then for those properties to even be ELIGIBLE to be considered work-for-hire they MUST fall into one of the following NINE (and ONLY nine) categories, as enumerated in copyright law.

1) A contribution to a collective work (such as a magazine, newspaper, encyclopedia, or anthology).

2) A contribution used as part of a motion picture or other audiovisual work.

3) A supplementary work, which includes pictorial illustrations, maps, and charts, done to supplement a work done by another author.

4) A compilation (new arrangement of pre-existing works).

5) A translation.

6) An atlas.

7) A test.

8) Answer material for a test.

9) An instructional text (defined as a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities).

Works that fall outside of these nine categories (like LOGOS!!) are CLEARLY ineligible to be work for hire, even with a signed contract. Just because you tricked someone into signing away their rights doesn't mean that it's legal to do so, or that the contract is binding. Just like Jack Kevorkian, you can not bend and interpret the law to suit your needs. Law is law, and your wrongdoing WILL catch up with you eventually. If you patronize one of these "crowdsourcing" design firms, realize that all that is standing between you and a major lawsuit is whatever poorly written "agreement" each of these shady, highly unethical at best, and illegal at worst "crowdsourcing" companies have commissioned some snake-in-the-grass lawyer to draft for them. Best of luck if a disgruntled artist ever does drag you into court. A contract by very definition MUST be inure to the benefit of BOTH parties. Otherwise, by law, it MUST be construed as a waiver. Ultimately, in these cases, the court decides, and I highly doubt any judge in his right mind would side with you and your "crowdsourcing" company no matter WHAT lies they may have told you - the decision is USUALLY ALWAYS in the favor of the artist.

ARTISTS!!! DO NOT EVER SIGN WORK FOR HIRE AGREEMENTS!! WE HAVE FOUGHT LONG AND HARD FOR THE RIGHTS THAT WE HAVE!! DO NOT LET THESE TRICKSTERS DECEIVE YOU!! YOUR WORK HAS WORTH!! IF YOU HAVE BEEN RIPPED OFF OR TRICKED, JOIN A UNION THAT WILL FIGHT FOR YOUR LEGAL RIGHTS, THEN FILE A GRIEVANCE!! SEEK BACK DAMAGES FOR THE USAGE OF WORK THAT IS RIGHTFULLY YOURS!!! JOIN THE GRAPHIC ARTISTS GUILD TODAY!! (WWW.GAG.ORG)

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